The correct answer is D. Risk retention is self-insurance. It is the practice of assuming the risk of loss for an event, rather than transferring the risk to an insurance company. Risk retention can be used for a variety of reasons, such as when the cost of insurance is too high, when the risk is uninsurable, or when the company wants to retain control over how the risk is managed.
Option A is incorrect because insuring with an insurance company is risk transfer. Risk transfer is the process of transferring the risk of loss from one party to another. In the case of insurance, the insured party transfers the risk of loss to the insurance company.
Option B is incorrect because insuring with another individual is also risk transfer. In this case, the insured party transfers the risk of loss to another individual who is willing to assume the risk.
Option C is incorrect because insuring with the owner of the company is also risk transfer. In this case, the insured party transfers the risk of loss to the owner of the company.
Risk retention can be a cost-effective way to manage risk, but it is important to carefully consider the risks that are being retained and to have a plan in place to manage those risks.